Great Leap Forward

Early this year, U.S. Department of Commerce experts predicted that some three years would pass before trade between the U.S. and China reached $300 million a year. But Sino-American trade has already taken a great leap forward.

This year it will probably exceed $800 million, up from $92 million in 1972. In only three years, the U.S. has become China's second most important international trading partner, after Japan.

So far, the new link is proving to be a bonanza for U.S. firms; the Chinese import nearly 15 times as much from the U.S. as they export. Among the biggest ticket items to date are some 4,000,000 tons of grain, ten Boeing 707 jetliners valued at $150 million, and eight ammonia plants to be built by M.W. Kellogg Co. for $200 million. The Chinese are also anxious to do business with giant American oil companies such as Exxon, Mobil and Caltex, and makers of petroleum exploration and drilling equipment, including U.S. Steel International, Phillips Petroleum and Baker Oil Tools. Some analysts think that China may have huge undiscovered oil reserves.

Spending Spree. Exploiting whatever oil they have could help the Chinese solve one of their toughest trade problems: paying for massive imports of foreign technology. In addition to expanding its trade with the U.S., China has been on something of an international spending spree. This year it contracted for about $ 1 billion of industrial goods including coal mining equipment from Great Britain, fertilizer and thermal power plants from Japan and a petrochemical complex from France. In January, the government disclosed that the Chinese were willing to seek "deferred payment arrangements"--a euphemism for foreign credits--to pay for still more technology. This departure from China's previous policy, buying only what it could pay for in cash, indicates a desire for even greater imports.

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